Asymmetric effects of China’s tourism on the economy at the city level: a moderating role of spatial disparities in top level tourist attractions

ABSTRACT

This study complements the tourism literature by proposing an asymmetrical effect of the tourism-led growth hypothesis on the city-level economy using panel data from 331 cities in China from 2004 to 2015 (3,972 observations). The results, based on an augmented Solow model and the system-generalized method of moments (GMM), reveal that the impact of tourism on city-level economic growth is indeed asymmetric and heterogeneous, depending on the presence of top-level attractions (TL), which are proxied by the World Heritage Sites or AAAAA (5A) scenic spots. The dynamic panel threshold model’s results also corroborate the asymmetric threshold effect of tourism on city-level economic growth. Tourism, in particular, has facilitated positive and significant economic growth in cities with TL but has had an uncertain and statistically insignificant impact on cities without it. The findings indicate that the validity of tourism-led growth depends on the availability and number of TL in each city, which serve as a moderator. As a result, we confirm tourism’s asymmetric effect and spatial heterogeneity on urban economic growth.

KEYWORDS:

• Asymmetry effect
• top-level attractions
• tourism
• economic growth
• threshold model
• spatial heterogeneity

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 China’s scenic areas can be divided into five A levels: AAAAA (5A), AAAA (4A), AAA (3A), AA (2A), and A (1A). The 5A level presents a scenic area normative and standardized quality rating and is the highest designation for scenic tourism spots in China. https://www.topchinatravel.com/china-guide/china-aaaaa-scenic-areas.htm

2 CEIC Data (2020, July 15). Retrieved from http://www.ceicdata.com/